Have you experienced the inconvenience of trying to drive somewhere and getting stuck in traffic due to a construction project? Infrastructure construction projects seem to take forever to complete. In fact, large infrastructure projects typically take 20% longer than scheduled and run 80% over budget [1]. Delays and cost overruns during infrastructure construction have a ripple effect on the entire economy. Commuters waste time in traffic that otherwise could be used productively working. Additionally, cost overruns steal public funds away from other critical infrastructure investments. Inefficiencies in the construction industry supply chain present an economic opportunity for software companies to offer digital solutions that generate profits and improve project outcomes for all stakeholders. Specifically, Autodesk is leading the charge by focusing on software products that help construction companies manage two distinct aspects of the supply chain: labor and materials.<\/p>\n
Labor supply presents a big challenge for general contractors attempting to manage dozens of subcontractor trades on construction sites. Coordination of subcontractor labor falls into the hands of the project manager, who has extensive other responsibilities ranging from assembling monthly payment requisitions, paying suppliers, writing contracts, managing safety, coordinating with the design engineer, and scheduling deliveries. Historically, Autodesk offered software products that allowed designers to develop engineering plans using computer-aided design (CAD). Autodesk is increasing its focus on construction management software that helps contractors manage labor supply. In an August 2017 interview, Autodesk CEO Andrew Anagnost highlighted his excitement for the construction industry and how Autodesk is positioned to add value through building information modeling (BIM) products [2]. For example, Autodesk BIM 360 Field allows construction managers to digitally track construction progress and communicate with subcontractors instantly via an internet platform. Autodesk BIM 360 Field eliminates the need for general contractors to reach subcontractors by telephone every time labor crews are needed on site. Instead, subcontractors have access to the Autodesk BIM 360 Field platform and receive updates in real-time allowing them to better manage allocation of labor across various jobsites. Autodesk\u2019s near-term focus on BIM technology will allow them to capitalize on the digitalization trend in the construction industry as companies seek ways to improve labor utilization.<\/p>\n
Autodesk is also targeting longer term digital solutions to supply chain issues in the construction management industry. Autodesk recently invested in ManufactOn, a software that helps contractors manage the supply chains of prefabricated construction materials. Material management practices on a construction site are important for maximizing productivity. If there is too much material on site, then labor crews must waste time relocating materials as construction progresses. On the other hand, if there is not enough material on site, then labor crews experience downtime as they wait for deliveries. One potential solution that improves schedule and reduces costs during construction is to prefabricate materials off-site and deliver them \u201cjust-in-time\u201d (JIT) for installation. General contractors are increasingly pursuing prefabricated options, with investment in prefabricated material approaches expected to double in the next five years [3]. General contractors managing a complex supply chain of prefabricated materials\u2013each with various lead times and delivery deadlines\u2013will benefit from digital solutions such as ManufactOn. Autodesk\u2019s investment in this supply chain management startup is a bet on the continued digitalization of the construction industry, and Autodesk has a long-term plan of making ManufactOn compatible with Autodesk BIM 360 Field [4].<\/p>\n
Autodesk is well positioned to capitalize on the digitalization of the construction industry in the next decade. Global infrastructure spending will need to exceed $3 trillion annually through 2030 to keep pace with projected global growth [5]. Amidst the vast investment required, contractors will seek to improve the efficiency of their labor supply chain and material supply chain. Increased labor productivity through use of BIM software has the potential to reduce infrastructure construction costs by 15%-25% in the future [6]. Savings of this magnitude on large infrastructure projects can represent hundreds of millions of dollars. Additionally, contractors that incorporate prefabricated elements achieve a 10% increase in efficiency [7], further reducing costs and schedule.<\/p>\n
While the benefits of Autodesk\u2019s construction management supply chain products are clear, the construction industry is historically slow to adopt new technologies, with most contractors preferring to follow rather than take the lead [8]. Despite the efficiencies that digitalization could bring to the infrastructure construction industry, one wonders how long it will take contractors to fully embrace the change and leverage Autodesk\u2019s digital tools for managing labor and material supply chains. Large organizations with substantial financial resources are likely more willing to pay for Autodesk\u2019s products, but the success of these labor and material supply chain software programs requires adoption by small subcontractors and material vendors as well. Autodesk should consider offering a simplified software product for smaller family-owned companies to incrementally edge the smaller players in the industry towards digitalization.<\/p>\n
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[1] Agarwal, R., S. Chandrasekaran, and M. Sridhar, \u201cImagining construction\u2019s digital future,\u201d McKinsey & Company, https:\/\/www.mckinsey.com\/industries\/capital-projects-and-infrastructure\/our-insights\/imagining-constructions-digital-future<\/a>, accessed November 2017.<\/p>\n [2] \u201cAutodesk\u2019s new CEO,\u201d AEC Magazine, <\/em>August 9, 2017, http:\/\/www.aecmag.com\/53-features\/interview\/1404-autodesk-s-new-ceo<\/a>, accessed November 2017.<\/p>\n [3] \u201c2017 FMI\/BIM Forum Prefabrication Study Reveals Changing Environment,\u201d FMI Corporation, <\/em>February 9, 2017, https:\/\/www.fminet.com\/news\/2017\/02\/09\/2017-fmibimforum-prefabrication-study-reveals-changing-environment\/<\/a>, accessed November 2017.<\/p>\n [4] Molitch-Hou, M., \u201cAutodesk Invests in AEC Startup for Prefab Management Software,\u201d https:\/\/www.engineering.com\/BIM\/ArticleID\/15651\/Autodesk-Invests-in-AEC-Startup-for-Prefab-Management-Software.aspx<\/a>, accessed November 2017.<\/p>\n [5] Garemo, N., M. Hjerpe, J. Mischke, R. Palter, and J. Woetzel, \u201cBridging global infrastructure gaps,\u201d McKinsey & Company, https:\/\/www.mckinsey.com\/industries\/capital-projects-and-infrastructure\/our-insights\/bridging-global-infrastructure-gaps<\/a>, accessed November 2017.<\/p>\n [6] \u201cThe Transformative Power of Building Information Modeling \u2013 The Impact of Digital in E&C,\u201d BCG Perspectives, <\/em>https:\/\/www.bcgperspectives.com\/content\/articles\/engineered-products-project-business-digital-engineering-construction\/?chapter=4#chapter4_section3<\/a>, accessed November 2017.<\/p>\n [7] Molitch-Hou, M., \u201cAutodesk Invests in AEC Startup for Prefab Management Software,\u201d https:\/\/www.engineering.com\/BIM\/ArticleID\/15651\/Autodesk-Invests-in-AEC-Startup-for-Prefab-Management-Software.aspx<\/a>, accessed November 2017.<\/p>\n